GBP/USD Daily Outlook: Pound at the Mercy of the US Dollar
GBP/USD Daily Outlook.
FUNDAMENTALS:
The pound has held up against the USD fairly well as the UK government decided to further ease restrictions on July 19. This calmed market concerns over the new Delta virus variant and helped the pound limit losses against the US dollar.
However, without any major domestic reports (except BoE Bailey's speech on Friday), the pound could be following the EUR and print further losses if the FOMC minutes charge the USD.
Latest Headlines:
USD News:
- US Dollar Index clings to gains in the mid-92.00s, looks to FOMC
- US dollar at the mercy of the market's take on FOMC minutes
- US 10-year Treasury yields refresh 19-week low
- US urges China, private sector to boost participation in G20 debt response
GBP News:
- UK June Halifax house prices -0.5% vs +1.5% m/m expected
- GBP/USD now focuses on 1.3735 – UOB
- Pound Sterling Price News and Forecast: GBP/USD remains depressed below
- 1.3800 on Wednesday
- GBP/USD teases 1.3800 amid risk aversion, FOMC minutes eyed
Upcoming Market Reports:
Here are the most important market reports for GBP/USD to follow in the coming days (all times are UTC timezone):
Wednesday at 14:00: USD JOLTS Job Openings (Expected: 9.30M, Previous: 9.29M)
Wednesday at 18:00: USD FOMC Meeting Minutes (Expected: , Previous: )
Thursday at 12:30: USD Unemployment Claims (Expected: 345K, Previous: 364K)
Thursday at 15:00: USD Crude Oil Inventories (Expected: , Previous: -6.7M)
Friday at 10:00: GBP BOE Gov Bailey Speaks (Expected: , Previous: )
INTERMARKET:
2-year yield differentials remain neutral for the pair. UST yields move sideways ahead of FOMC minutes.
SENTIMENT:
Currency Strength Index:
TECHNICALS
The GBPUSD pair trades in a short-term downtrend after yesterday's strong sell-off, forming a consolidation this morning. GBP recovered some ground after attempting a break down below a bearish wedge on the 1-hour chart, with the 38.2% Fib level providing immediate resistance (1.3820).
Markets are cautious ahead of the FOMC minutes which is reflected in the sideways trading in the pair. However, the most recent 1-hour candlestick (pinbar) suggests that sellers are still interested in shorting GBP at attractive levels.
Levels to follow (Liquidity):
Major resistance: 1.3850 (61.8% Fib)
Minor resistance 1.3820 (38.2% Fib)
Minor support: 1.3780 (daily low)
Major support: 1.3730 (weekly low)
== SUMMARY ==
I remain bearish on the pair based on the reasons mentioned above. Weekly low at 1.3730 might be within range after the FOMC minutes release.
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FUNDAMENTALS:
The pound has held up against the USD fairly well as the UK government decided to further ease restrictions on July 19. This calmed market concerns over the new Delta virus variant and helped the pound limit losses against the US dollar.
However, without any major domestic reports (except BoE Bailey's speech on Friday), the pound could be following the EUR and print further losses if the FOMC minutes charge the USD.
Latest Headlines:
USD News:
- US Dollar Index clings to gains in the mid-92.00s, looks to FOMC
- US dollar at the mercy of the market's take on FOMC minutes
- US 10-year Treasury yields refresh 19-week low
- US urges China, private sector to boost participation in G20 debt response
GBP News:
- UK June Halifax house prices -0.5% vs +1.5% m/m expected
- GBP/USD now focuses on 1.3735 – UOB
- Pound Sterling Price News and Forecast: GBP/USD remains depressed below
- 1.3800 on Wednesday
- GBP/USD teases 1.3800 amid risk aversion, FOMC minutes eyed
Upcoming Market Reports:
Here are the most important market reports for GBP/USD to follow in the coming days (all times are UTC timezone):
Wednesday at 14:00: USD JOLTS Job Openings (Expected: 9.30M, Previous: 9.29M)
Wednesday at 18:00: USD FOMC Meeting Minutes (Expected: , Previous: )
Thursday at 12:30: USD Unemployment Claims (Expected: 345K, Previous: 364K)
Thursday at 15:00: USD Crude Oil Inventories (Expected: , Previous: -6.7M)
Friday at 10:00: GBP BOE Gov Bailey Speaks (Expected: , Previous: )
INTERMARKET:
2-year yield differentials remain neutral for the pair. UST yields move sideways ahead of FOMC minutes.
SENTIMENT:
Currency Strength Index:
TECHNICALS
The GBPUSD pair trades in a short-term downtrend after yesterday's strong sell-off, forming a consolidation this morning. GBP recovered some ground after attempting a break down below a bearish wedge on the 1-hour chart, with the 38.2% Fib level providing immediate resistance (1.3820).
Markets are cautious ahead of the FOMC minutes which is reflected in the sideways trading in the pair. However, the most recent 1-hour candlestick (pinbar) suggests that sellers are still interested in shorting GBP at attractive levels.
Levels to follow (Liquidity):
Major resistance: 1.3850 (61.8% Fib)
Minor resistance 1.3820 (38.2% Fib)
Minor support: 1.3780 (daily low)
Major support: 1.3730 (weekly low)
== SUMMARY ==
I remain bearish on the pair based on the reasons mentioned above. Weekly low at 1.3730 might be within range after the FOMC minutes release.
Please hit the 'LIKE' button if you find this post useful. Also, don't forget to follow to get more trade ideas like this. Thanks!
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